Remark Holdings(US:MARK)2022-08-15 22:23Financial Data and Key Metrics Changes - Total revenue for Q2 2022 was $2.6 million, down from $4.4 million in Q2 2021, with a decrease of approximately $2.5 million in U.S. revenue due to a slowdown in the daily fantasy sports industry [37][38] - Gross profit decreased by approximately $1.1 million Q-over-Q to $0.7 million, resulting in a gross margin of 27.8%, compared to 43.9% in the same period in 2021 [38] - The net loss totaled $12.5 million or $0.12 per diluted share in Q2 2022, compared to a net loss of $1.6 million or $0.02 per diluted share in Q2 2021 [39] Business Line Data and Key Metrics Changes - The AI business in educational systems grew, with installations in over 60 new schools, totaling approximately 500 campuses [6][7] - Smart community deployments reached close to 900 communities, impacting over 3.5 million people daily, with expectations for further growth as lockdowns lift [7][8] - Smart construction solutions completed installations at 14 sites, bringing the total to 67, with increasing demand for additional solutions from customers [8][9] Market Data and Key Metrics Changes - The company faced challenges in the U.S. market due to lockdowns affecting branch operations, but anticipates a rapid recovery as restrictions ease [9] - The U.S. market is expected to benefit from the Biden infrastructure bill, which will begin disbursements for infrastructure improvements [11][12] - The UK market is addressing issues like fly-tipping, with the company involved in projects to help municipalities detect and prevent illegal dumping [21][22] Company Strategy and Development Direction - The company is focusing on expanding its AI solutions in the U.S. and UK, targeting the safety and security market with its Smart Safety Platform [15][28] - A monthly licensing-based recurring revenue model is being implemented for the Smart Safety Platform, allowing for predictable revenue streams [17] - The company aims to leverage its technology to enhance safety and security across various sectors, including transportation and public safety [34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of COVID-19 lockdowns on business operations but expressed optimism about future growth as markets reopen [6][36] - The company is confident in its revenue model and is finalizing paid pilot projects with several potential customers in the U.S. [12][13] - Management highlighted the importance of AI in addressing operational challenges and improving efficiency in various industries [11][34] Other Important Information - The company is evaluating refinancing options following a modification of its debt agreement, extending the maturity date until October 31, 2022 [40] - The cash balance as of June 30, 2022, was $1.1 million, down from $14.2 million at the end of 2021, with net cash used in operating activities totaling $11.1 million for the first half of 2022 [39] Q&A Session Summary Question: What are the expectations for revenue growth in the U.S. and UK markets? - Management indicated that they are working on finalizing paid pilot projects with several potential customers, which could lead to significant revenue opportunities [12][13] Question: How is the company addressing the challenges posed by COVID-19 lockdowns? - The company is focusing on building its business where lockdowns are less severe and is preparing for growth as restrictions are lifted [6][9] Question: What is the company's strategy for its AI solutions moving forward? - The company plans to expand its Smart Safety Platform and leverage its technology to enhance safety and security across various sectors [15][28]